The S&P/ASX 300 Index (ASX: XKO) dividend stock MyState Ltd (ASX: MYS) could be one of the most underrated ASX financial shares around.
MyState describes itself as a diversified financial services group that consists of MyState Bank and TPT Wealth, a trustee and wealth management company.
It has been a good time to own ASX financial shares, with a number of ASX bank shares significantly outperforming the S&P/ASX 200 Index (ASX: XJO) in 2024 to date.
The ASX 200 has risen less than 10% this year, while the Commonwealth Bank of Australia (ASX: CBA) share price has gone up 39%, the Westpac Banking Corp (ASX: WBC) share price has lifted 39%, the ANZ Group Holdings Ltd (ASX: ANZ) share price has climbed 12%, and the National Australia Bank Ltd (ASX: NAB) share price has soared 21%.
The MyState share price has gone up 27% this year, and one broker believes the ASX 300 dividend stock is a buy for the year ahead.
Buy rating on the ASX 300 dividend stock
Tony Paterno from Ord Minnett has written about his positive view on the business on The Bull.
He suggested that the long-term value on offer from MyState shares is "compelling", in Ord Minnett's view.
There are a few reasons why the broker likes the ASX financial share.
First, he suggested that the business can generate "strong" earnings per share (EPS) growth.
Second, Paterno noted that the ASX 300 dividend stock has a high, fully franked dividend yield.
The third reason to like the business is due to its "competent management team".
The broker also pointed out that MyState has proposed to acquire Auswide Bank Ltd (ASX: ABA). Auswide shareholders will vote on the proposed takeover in a couple of months.
This meeting was recently postponed from 2 December 2024 to 3 February 2025.
Auswide and MyState are continuing to work with the Australian Prudential Regulation Authority (APRA) to progress the relevant applications. The two businesses expect to be able to announce the outcome of those applications in early 2025.
Tony Paterno finished his commentary on the ASX financial share with the following thoughts:
MYS is an attractive income stock and should generate capital growth from synergies in the proposed acquisition.
MyState share price snapshot
In the past 12 months, the ASX 300 dividend stock has risen by more than 30%.
According to the projections on Commsec, the MyState share price is valued at less than 12x FY25's estimated earnings with a projected grossed-up dividend yield of 8.5%, including franking credits.
